'I've never seen a bank account conducted that way'

AusGold Mining Group had ambitions to mine a gold deposit near Tibooburra, north of Broken Hill, and former AusGold accountant Peter Johnston said he remembered the early excitement.

"I would say probably for the first 18 months of the project it was a pretty exciting and vibrant project," he said.

But it did not last.

"I've been 45 years in the mining industry, of which all were spent basically accounting and administration, [and] I've never seen a bank account conducted the way the AusGold bank account was conducted," he said.

"Money would come in, money would go out — I could never understand the reasoning for that."

Towards the end of his time at the company he struggled to pay bills, and preparations at the mine site stalled when a contractor who was owed money pulled out.

"I had no money to actually pay outstanding accounts. I'm led to believe that's because of a tightening of funds out of China.

"There was over $400,000 owed to our creditors."

Ms Brown, who also worked for AusGold, said money seemed to be "no object" to Ms Zou.

"She always seems to be flashing the money around and very generous with giving out gifts and stuff like that," she said.

"But when it comes to the real world, what did she think we were going to do?"

A backpack stuffed with $120,000 in notes

The next few months were unpredictable.

Ms Brown said one month some people would be paid, then the next month some other people would be paid.

"So contractors weren't getting paid, our wages weren't getting paid but we'd come so far with Sally and we wanted to have this trust in her and the belief in her that she was doing the right thing," she said.

"But from what I've seen, what happened in the end, I think we were all let down really badly."

Mr Johnston said there were times when Ms Zou said she was in the bank organising money and promised money was coming, but it never arrived.

"That happened on a regular basis from January right up to the middle of April when we finished," he said.

In April, Mr Johnston and Ms Brown were among nine employees who were sacked.

The termination letter stated that AusGold had suspended all work in Broken Hill and at the mine site.

Ms Zou rarely gives interviews and declined 7.30's request.

But when asked by the ABC's Broken Hill reporter, she denied not paying her workers.

All of the former workers except one say Ms Zou ultimately paid what was owed to them and contractors.

But the way one payment was made, at a meeting in Adelaide, took them by surprise.

"Basically a knapsack Sally brought into the room emptied out $120,000 in notes," Mr Johnston said.

Former AusGold contractor Ana Storey was astounded.

"Nobody deals in cash in business," she told 7.30.

"It would have just as easily, I would have thought, been electronically transferred, but it is what it is."

7.30 pressed Ms Zou for more information and a public relations firm responded on her behalf.

They said Ms Zou recognised many of her early dealings did not align with Australian business culture and practices and she was addressing that with the guidance of professional advisers.

They said she thought she was doing the right thing paying her workers in cash and, while it was common practice to do so in China, she now understood that was not the way things were done here.

The statement said Ms Zou had a background in engineering, finance and international trading and she had worked in these fields in China and other places overseas.

They said she had no friends or family highly placed in the Chinese Government and her money had entered the country legally and had been scrutinised by the Federal Government's financial intelligence and regulatory agency Austrac.

Asked about the current status of her mine project, the public relations firm responded that it was "commercial in confidence".